In Cooper v Thameside Construction Co Ltd (2016), the Courts revisited causation within days of our last update.

Summary

Unless a party can satisfy the burden of proof on the balance of probabilities, their claim will fail, even if the claim appeared promising in the beginning.

The facts

The Coopers had engaged Thameside to carry out significant construction work to their property between 2005 and 2009 pursuant to a JCT Contract on Intermediate IFC 98 Form (Revision 4). On 18 November 2010, there was a very substantial flood when a Polyplumb connector in en-suite bathroom "6" burst on the top floor. It was agreed between the parties that the flood occurred as a result of defects in the installation of the Polyplumb connector and associated pipework. Water was discharged through the house for a period of about an hour or so before the water was turned off causing over £6m of damage to the house and contents. The Coopers' insurers brought a subrogated claim against Thameside for the recovery of losses suffered.

Initially, Thameside had admitted that the installation of the Polyplumb connector was defective, but argued that it was not liable as the work had been carried out by one of its independent sub-contractors. Thameside subsequently amended its Defence with a volte face to deny liability. They claimed that their independent contractor had not installed the Polyplumb connector and that the installation was carried by other contractors who had been directly engaged by the Coopers on site. The matter became a "who dunnit".

Following commencement of the works on site the scope of work to be carried out by Thameside under the JCT contract was reduced. Specialist joinery in en-suite 6 was to be made the subject of a separate contract between Coopers and Ottima whilst specialist stoneworks were to be supplied by a firm called Signature. These contractors had to work in the vicinity of the works carried out by Thameside and the key issue was to determine who had installed or worked on the connector. Thameside contended that the defective Polyplumb connector had been installed by one of these other contractors.

Decision

After a thorough review of the evidence the Court reiterated that the position in relation to competing theories of causation is as set out in Graves v Brouwer (2015), where Lord Justice Tomlinson approved the following statement of principle: "provided that all possible causes are known, the ranking of those causes in terms of probability may lead to a safe conclusion that the one considered the most probable was the probable cause of the event, provided that it was not improbable."

However, the Court went on to reiterated that in a case involving competing theories as to what caused a loss:

a) "The court is entitled to engage in a systematic analysis of competing theories and eliminate one in favour of the other;

b) That, in itself, may lead to the conclusion that the preferred theory is more likely than not to be true; but

c) The court must always then stand back and ask itself the ultimate question as to whether or not the preferred explanation is more likely than not to be true."

After a thorough review of the evidence, the court held that Thameside's independent contractor had probably carried out the plumbing works in en-suite 6 but denied the installation of the connector. There were two real possible alternative explanations for how the defective Polyplumb connector came to be installed and Coopers/their insurers had not demonstrated on the facts that Thameside had installed the Polyplumb connector and that it had not been installed or altered by one of the Coopers' other contractors whilst they were carrying out their works on site. In the light of these uncertainties, the Court was loathe to find that Thameside was liable for the flood. This was the result, notwithstanding Thameside's initial admission that its sub-contractor had installed the Polyplumb connector that the subrogated recovery claim by the Cooper's insurers appeared initially to have promising prospects of success

Conclusions

Parties need to seek advice as to the prospects of success and continue to evaluate the risk of litigation, even where the other party has seemingly accepted liability – one needs to ensure there is sufficient evidence to found a claim against an incomplete evidential background.

As an added complication, even in cases where a defendant can be shown to have supplied defective products to a site, the recent decision of Howmet Ltd v Economy Devices Ltd & Others (2016) (see further here) serves as reminder that a defendant may still not be found liable. In that case, the Court of Appeal considered a manufacturer's continuing liability for defective products that were implicated in a fire in an industrial facility. The claimant's employees had become aware of defects in the goods supplied by the defendant and that these defects posed a risk of fire. Before steps could be taken to replace the defective goods it was clear from the changes in procedure that they were not relying on the products to prevent a fire from occurring. After deciding that knowledge of the claimant's employees could be imputed to the claimant company, it was held that once the end user is aware that a product is defective, if he decides to continue using it and it results in injury or damage, he does so entirely at his own risk, i.e. the manufacturer of the defective product has no continuing duty to the end user and in the alternative, the claimant's non reliance on the product broke the chain of causation. As a result Howmet's claim in negligence against the product manufacturer failed.